Cash Vs. Credit Cards for Merchants

“Why do I need to accept payments via cards and ACH when my customers can pay through cash?” the merchant said.

“Do you get customers who don’t want to pay via cash?” I asked.

“I do,” the merchant replied.

“What do you do then?” 

“Well, they can always walk across the road and purchase from the other store. I will not accept credit cards. I feel that they are highly inconvenient and cost a lot.”

“Why do you feel so? What if I told you that yes, accepting cash payment has its benefits, but accepting card payments also has its own set of benefits.” 

“What benefits? Tell me more.”

The benefits of cash vs. credit cards are sometimes confusing. With this blog, we discuss these differences.


Accepting Payments Via Cash Vs. Credit Cards

Pros of Accepting Payments Via Cash

Cash is undoubtedly one of the most widely accepted methods of payment. Most small business owners accept cash payments, especially for small ticket price products or services. Carrying out transactions via cash is primarily safe and preferred by most merchants.

Receive Payment Immediately

Merchants can effectively use the cash payment to carry out another transaction as soon as they receive it. Banks take a while to clear payments received via credit cards, checks, or ACH. These funds sit in the “uncleared funds” section during this short period. The merchant cannot access these funds till the bank clears them. With cash, the merchant has the flexibility to conduct transactions as they see fit without waiting for the funds to hit their bank account

Offer Cash Discount

Merchants can implement cash discounts to attract more customers when they accept payments through cash. Such a program can help both the merchant and the customer save money. With a well-defined cash discount program, merchants can pass the savings from nil processing fees to their customers. Some customers prefer paying with cash to get rid of the avoidable processing fees. Here are some of the most commonly asked questions about the cash discount program.

Prevent Fraudulent Chargebacks

Merchants that deal with high-volume transactions often deal with fraudulent chargebacks that consume unnecessary time and energy. There is no scope for such excessive chargebacks with cash payments. 

Making a cash payment has its set of pros and cons. However, most thoughtful financial advisors say that consumers should carry a small cash balance to handle transactions when and if the card network suffers an outage. In the rare situations of a credit card outage, cash is one of the top alternative modes of payment. Read more about some of the other modes of alternative payments you can leverage during a credit card outage. 


Pros of Accepting Payments Via Credit Cards

The most significant credit card offer is its “buy now, pay later” scheme. Savvy consumers that pay their bills on time never incur extra credit card penalties and can easily leverage the benefit of spending more than they have. These consumers can manage their credit card debt correctly, thereby giving them a massive advantage over the ones that use cash to pay all the time. However, the benefits of such credit cards are not restricted to the end consumers.

Merchants can leverage the following benefits by accepting credit card payments.

Adopt Contactless Transactions

The need for contactless transactions has only gone up since the COVID hit. More and more merchants are now offering different payment modes that help minimize the risk of exposure to the virus. 

Discover the top benefits of a contactless payment method. Modern-day rewards credit cards have a small NFC chip that helps the consumers pay by placing the card on the merchant’s card reader instead of swiping it. A merchant can easily attract more customers, offer a better service, and reduce exposure to diseases by accepting payments with contactless technology.

Get Easier Reconciliation

Merchants can manage the payments received through digital means more seamlessly than cash payments. Digital transactions create an automatic paper trail with the merchants’ checking accounts, thereby helping them manage and track their expenses. They also leverage innovative back-office accounting tools like QuickBooks to complete the reconciliation process. When a customer pays with online ACH, credit card, debit card, or through an online payment portal, the merchant’s bank account automatically records this transaction.

Merchants additionally utilize advanced plugins by the top payment processors to automatically feed data into the accounting systems.

Store Money Securely

Financial advisors often recommend that merchants keep limited cash at their cashier terminals to reduce damages in case of a robbery. Cash is prone to physical damage and theft, unlike payments through credit and debit cards that directly go to the merchant’s bank account. 

Offer Better Customer Satisfaction

Customers instantly pay the exact billed amount with the credit card hassle-free. Unlike cash payments, where the cashier needs to spend some time giving the change, the payments with credit and debit cards are more seamless. Merchants that deal with long POS queues quickly increase customer satisfaction and reduce the overall turnaround time by accepting card payments. 

Find it Easier to Handle Disputes

Creating a digital trail of payments helps merchants easily handle unwanted disputes with their customers. With technology in place, customers and merchants can quickly go back to their credit card statements to track their expenses with digital payments. 

Collect Payments Online

Businesses that deal with cash only do not have a way to conduct business online. However, by adopting ACH and credit card payment technology, they easily take their business online and target a more extensive customer base. 


Using credit cards is highly lucrative for end consumers due to the ease of use and rewards programs set up by card issuers. Moreover, these issuers have come up with several fraud protection plans to prevent misuse of these cards. Individuals can easily report their cards lost or stolen to block them within seconds. This is why more individuals now rely on card payments for big and small transactions. Merchants that do not accept credit card payments miss out on a huge chunk of business. 

With top-notch payments processors, you can leverage technologies that help you accept payments online within seconds. Set up a call today with our relationship managers to understand how credit card and ACH processing can help you get more customers, save money, and offer excellent services. 


Date originally published: March 11, 2022’s innovative solutions help you accelerate payments simply, securely, and reliably.

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